Indain goverment Budget 2022: Digital Rupee to be issued,
digital assets to be taxed at 30%
[India Budget 2022: Cryptocurrency will be taxed at 30 per cent. Meanwhile, the central bank digital currency (CBDC) is a digital form of fiat currency that can be transacted using wallets backed by blockchain and is regulated by the central bank...]
In October 2021, Nigeria launched Enaira, which is a non-interest-yielding CBDC. Block chain technology also powers cryptocurrency, non-fungible tokens [NFT"s] and it is a distributed ledger, updated in real-time. This will impact gains from cryptocurrency and NFT"s as well, which have seen a boom in India in recent times. Further, loss from transfer of virtual digital asset cannot be set off against any other income,” she added.
In order to capture the transaction details, the government has also provided for TDS on payment made in relation to transfer of virtual digital asset at the rate of 1 per cent of such consideration above a monetary threshold. India will not be the only country to launch a digital currency. Gifting of virtual digital asset is also proposed to be taxed in the hands of the recipient.
The move comes amid the government’s plans to introduce a Bill on cryptocurrencies that seeks to prohibit “all private cryptocurrencies in India” with “certain exceptions”. “No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost of acquisition. This was announced by Finance Minister Nirmala Sitharaman during the Union Budget 2022 today. A new digital rupee powered by block chain technology will be issued by the Reserve Bank of India starting 2022-23. In a block chain, the transaction records cannot be changed at all and the ledger is transparent and authentic, which is why it is used in cryptocurrency as well.
Meanwhile, the government has also announced that any income from transfer of digital assets will be taxed at 30 per cent rate.